Nomura Holdings Inc (NMR) Q3 2025 Earnings Call Highlights: Strong International Growth and ...

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Thu, Feb 6, 2025, 12:03 AM 4 min read

Net Revenue: JPY502 billion, up 4% quarter-on-quarter.
Income Before Income Taxes: JPY138.3 billion, up 4% quarter-on-quarter.
Net Income: JPY101.4 billion, up 3% quarter-on-quarter.
Earnings Per Share (EPS): JPY33.08.
Annualized Return on Equity (ROE): 11.8%.
International Income Before Income Taxes: JPY51.8 billion, up 30% quarter-on-quarter.
Net Revenue for First Nine Months: JPY1,439.8 billion, up 29% year-on-year.
Income Before Income Taxes for First Nine Months: JPY374.2 billion, up 106% year-on-year.
Net Income for First Nine Months: JPY268.8 billion, up 146% year-on-year.
Wealth Management Net Revenue: JPY116.3 billion, flat quarter-on-quarter.
Wealth Management Income Before Income Taxes: JPY46.2 billion, up 2% quarter-on-quarter.
Investment Management Net Revenue: JPY45.7 billion, down 18% quarter-on-quarter.
Investment Management Income Before Income Taxes: JPY18.9 billion, down 41% quarter-on-quarter.
Wholesale Net Revenue: JPY290.5 billion, up 10% quarter-on-quarter.
Global Markets Net Revenue: JPY239 billion, up 8% quarter-on-quarter.
Investment Banking Net Revenue: JPY51.5 billion, up 22% quarter-on-quarter.
Group-wide Expenses: JPY363.7 billion, up 4% quarter-on-quarter.
Tier 1 Capital: JPY3.6 trillion.
Common Equity Tier 1 Ratio: 16.3% as of the end of December.

Warning! GuruFocus has detected 3 Warning Sign with NMR.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Nomura Holdings Inc (NYSE:NMR) reported a 4% increase in group-wide net revenue quarter-on-quarter, reaching JPY502 billion.
The company achieved a 3% increase in net income, amounting to JPY101.4 billion, marking the seventh consecutive quarter of profit growth.
International operations contributed significantly, with income before income taxes in international regions increasing by 30% over the last quarter.
The asset management business reached a record high in assets under management, climbing to JPY93.5 trillion.
Nomura Holdings Inc (NYSE:NMR) achieved an annualized ROE of 11.8%, the highest since December 2020, indicating strong profitability and strategic success.

Negative Points

Investment Management net revenue decreased by 18%, and income before income taxes fell by 41%, largely due to a decline in American Century Investments related to valuation gains.
Total sales by product declined by 11% quarter-on-quarter, with a notable 12% drop in stock sales.
The company faced challenges in the US and Europe, with some regions experiencing slower growth and profitability.
There was a slight decline in revenue related to Japanese stocks and bonds, impacting overall flow revenue.
Nomura Holdings Inc (NYSE:NMR) experienced increased expenses, with group-wide expenses rising by 4% to JPY363.7 billion, partly due to higher professional fees and transaction-related expenses.

Q & A Highlights

Q: Can you discuss the sustainability of the current strong revenue environment in the Wholesale fixed income business, and are you satisfied with the current profitability? A: Takumi Kitamura, CFO, explained that the securitization business in the US was strong, with a focus on improving fund turnover and diversifying the securitization portfolio. While satisfied with the current profitability, Kitamura noted there is still room for improvement, particularly in rates products, which are showing signs of recovery.

Q: Regarding the sale of real estate and asset efficiency, are there other targets to improve asset efficiency, and what is the process for selling assets? A: Kitamura stated that the sale of the Takanawa property was due to the completion of new headquarters with training facilities. There are no current plans to change the ratio of holdings in NRI stocks or other assets.

Q: Can you provide insights on the shareholder return policy, especially in light of the commemorative dividend and potential buybacks? A: Kitamura confirmed that the JPY10 commemorative dividend is separate from the regular dividend payout. The policy of a 50% or more return ratio remains unchanged, and proceeds from asset sales will be used for shareholder returns, potentially including share buybacks.

Q: How is the investment trust business in Wealth Management evolving, particularly with private credit products? A: Kitamura noted that private products are being strengthened, with careful screening to ensure quality offerings. While the frequency of new product launches may not be high, the focus is on aligning with clients' risk appetites.

Q: What impact have the tightened rules on client visits had on Wealth Management, and how do you plan to manage costs in this segment? A: Kitamura mentioned that while there has been some impact on new customer acquisition, existing client relationships remain strong. Cost control measures are stable, with potential short-term increases due to IT investments aimed at future cost reductions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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